Launching a startup often requires a bunch of investors who see potential in your idea. The key is to pitch your idea to investors who would be willing to support your idea. Normally, all you have is one shot to make an impression. You may think your 30 seconds elevator pitch is highly convincing. Unfortunately, one wrong move can break the deal. To ace your chances, avoid these common mistakes made by entrepreneurs when pitching their ideas to investors:
1: Not Knowing Your Audience
First things first, if you don’t even know your audience, you are not ready to pitch yet. Every investor has different priorities. Some care about biotech, digital media while others only care about mobile apps. Some investors have a mandate about the geographic location of the company. Too often, first-time entrepreneurs get so excited to speak with investors that they fail to do homework on the investors themselves. Take a day to learn about your investors. These are the questions you must ask yourself:
- Is the potential investor a member of the angel network?
- What is the investor’s background?
- Are they interested to invest in your business sector?
- What investments have they made in the past?
- How much money do they normally invest?
These questions will let you know if the potential investor is actually the right fit for your business. Google them up, check their website, and stalk their LinkedIn profile. Googling people nowadays is as easy as finding the Spectrum Waco Tx phone number from the Internet.
What’s the point of pitching to investors who are not interested in your idea? Hence, do your homework before pitching to make sure your business aligns with the objectives of the investor. To save both of your time, look at the investor’s website. It should state the location, sector, and stage they are looking forward to investment. Before meeting the investor, find out everything about their firm and their personality.
2: Going Without an Executive Summary
No investor in the world has the time to reach a booklet of your business plan to figure out what your business is all about. This is where an executive summary comes to the rescue. It should address the following:
- What problem does your business solve
- Your target audience
- Market size
- Customer acquisition cost
- Projected expenses and revenues
- A solid exit strategy
3: Asking to Sign an NDA before Sharing the Information
Part of knowing your investor is to figure out if they have a policy of not signing a non-disclosure agreement. Don’t blow your chances of signing a deal by asking them to sign an NDA before sharing the information about your business.
In case there’s something confidential, don’t share it in the first place. Always assume that your pitch deck will be shared broadly. That’s why the pitch deck must include only that much information that generates the interest of an investor. No need to deep dive. For additional protection, add a copyright notice at the bottom of the pitch deck.
4: Relying on the Deck Too Much
Some entrepreneurs end up putting too much emphasis on the deck to tell the story. When the investor tries to have a conversation, they seem lost. While having a deck is important, you must also take every opportunity to own a conversation with the investor.
Decks work best when there are many people in the room to provide a structure to your communication. Otherwise, you may use the deck as a tool for reinforcing the conversation by sharing it as a follow-up to the meeting. This will help you stage for the next conversation.
5: Missing the Facts and Figures
Always back up your claims with data. Sometimes, a startup is too early in the formation and there is limited historical data to back the assumptions with. In that case, you may establish assumptions that can be supported based on what others in the industry are up to.
6: Not Adding a Follow-Up Step
Always end the meeting with an understanding of what should be the next steps even if the meeting was a failure. Most entrepreneurs don’t prefer hearing direct feedback.
Let’s say the meeting went well. You may ask the investor what additional information they need from you. Also, ask what should be the next step for evaluation. On the other hand, if the meeting went south, ask the investors for suggestions of other investors. Always be thankful for their time.
Conclusion
With these tips, you can save your ship from sinking. Even if you don’t score investors in the first attempt, make sure you stay on top of the minds of your investors just like Spectrum com easymove is on the mind of Internet and cable customers.
These mistakes are not fatal, but as you practice and do your homework, you will be able to convince the investor.
